IRS Directive Regarding 401(k) Rollovers

FOR IMMEDIATE RELEASE

As many of you are aware the IRS recently released its long awaited guidelines for 401(k) rollovers with regard to business start-ups.  We have been asked by several of our clients what our position is on the issues raised by the guidelines and what if anything should be done.

It does appear that the IRS spent a considerable amount of time in its review of this transaction and reached the following conclusion:  "We do not believe the form of these transactions may be challenged as non-compliant per se."  The IRS did however address several points of compliance that should be reviewed on a "case by case basis" if the plan is audited.

We have spent the last several days reviewing these points with both our in-house ERISA counsel as well as outside counsel and have reached the opinion that we, at FranFund, are and have been compliant with these guidelines.  FranFund has always taken a very conservative approach in this regard and will continue to do so; and while we will need to make no significant changes at this time we will also continue to stay abreast of any IRS points of emphasis and inco